Per Virginia's Department of Taxation, the $1050 federal Kiddie Tax exclusion is not allowed to be excluded for state calculations:
The department's long-standing policy has been that the Virginia taxable income of a parent making the federal election includes that portion of federal adjusted gross income (FAGI) representing the income of a child. This is because of the statutory requirement in Va. Code §58.1-322 that the Virginia taxable income of an individual taxpayer equal that individual's FAGI for the year.
As such, the parent may not subtract that portion of FAGI which represents the income of the child, when computing his or her Virginia income tax liability. In the case of a combined (filing status 4) return where each spouse reports his or her income, the income of the child may be allocated either to the husband or the wife, so long as the total FAGI listed on their Virginia return equals the FAGI reported on their federal return.
https://www.tax.virginia.gov/laws-rules-decisions/tax-bulletins/92-11
